Solana’s DeFi airdrop boosts Phantom’s user base to new heights

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Phantom, a heavily used cryptocurrency wallet in the Solana ecosystem, has more than tripled its active user base over the past year, CEO and co-founder Brandon Millman tells TechCrunch exclusively.

Millman said Phantom will reach 3.2 million monthly active users (MAUs) in January 2024, up 220% from 1 million a year ago and 463.5% more than the 167,000 installs in the same period. It reportedly recorded 941,000 installs. “These numbers are essentially our peak” and exceed usage and metrics from the previous crypto bull market in 2021 and early 2022, he added.

“The Jito and Jupiter airdrops were a huge turning point for the ecosystem,” Millman said. “Solana has reached escape velocity and proven to be a first-class ecosystem. This is a platform that attracts the world's best builders.”

Solana-focused decentralized finance (DeFi) Jito Network and decentralized aggregator Jupiter will conduct airdrops in late 2023 and early 2024, respectively, to reward users of their projects as a “thank you” for using their services. provided a reward or token to.

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These airdrops, combined with the recent Solana meme coin craze, may be causing a surge in both new and old users to the ecosystem.

“This is a lot of DeFi activity, but this means that crypto wallets are becoming the new entry point into crypto,” Millman believes. When users first get into cryptocurrencies, a common way is through centralized crypto exchanges like Coinbase, which he attributes to “word of mouth,” but now He believes the world is changing and “more people are downloading crypto wallets.” To get started.

This entry point for wallets and on-chain applications is becoming “the new thing that people are trying to access when they want to use cryptocurrencies,” Millman said.

Phantom aims to not only be a place for people to hold and trade cryptocurrencies, but also “secure access” to the Web3 experience, Millman said. During the Jupiter airdrop, helping drive 1.1 million visits to the Jupiter billing site by sharing links on the Phantom website to prevent people from being fooled by malicious links , he added.

Growth rather than profit

Phantom started in 2021 as a Solana-only crypto wallet, but has since expanded to also offer multi-chain support for Ethereum, Polygon, and Bitcoin. Currently, the company aims to grow its user base and become the top destination for people new to cryptocurrencies and wallets.

“Currently, we are in a phase of intensive growth. We are not focused on generating revenue, but prefer to feed it back into user growth. We want more users to sign up. The more developers we have, the more developers will be attracted to build on top of the ecosystem, and the more applications and users we can acquire. We’re looking to grow,” Millman said.

Phantom makes money in the same way as most other wallets. This means providing a convenient in-app feature for exchanging cryptocurrencies and charging a small fee for it. The company is backed by investors including Paradigm, Andreessen Horowitz, Jump Capital and Solana, and also has a “strong balance sheet,” so it doesn't need to focus too much on earnings right now, Millman said. said.

“We believe that the future of wallets will be multi-chain, just as crypto exchanges have evolved. Coinbase started as a Bitcoin-only exchange, then added support for Ethereum, and… led to another exchange,” he said. “No one can imagine a world where there is only one coin on an exchange. Wallets will follow the same path.”

Although it is still too early to expect the masses to self-custody their crypto assets, the increased usage of crypto wallets signals further growth in the sector. Millman added that previously on-chain apps have been too expensive or complex to use, but these airdrops and the resulting influx of users show the benefits of composability.

Cryptocurrency exchanges like Coinbase run completely closed systems, whereas on-chain systems like Solana are open systems that developers can build on top of. As a result, people may miss out on rewards such as airdrops by trading or staking assets on exchanges, Millman noted.

Considering that crypto wallets allow users to trade cryptocurrencies, they also provide access to on-chain perks, making them more attractive than exchanges. “Currently, DeFi applications are airdropped to encourage use, and the only way to get them is to download a wallet.” […] “User intent and on-chain app types are growing and diversifying, and wallets are the entry point,” he said.

Millman expects the adoption of cryptocurrency wallets to continue to increase as more providers and ecosystems introduce new features and explore new avenues. “There are certainly still a lot of sharp edges and foreign concepts. Secret recovery phrases are the de facto key management for wallets. But these are the areas we are looking to innovate this year and how We're excited to show you the next evolution of what it will become.”

In the future, he expects cryptocurrency wallets to help people do more than just buy, hold, and sell cryptocurrencies. “This is a window into a richer world of interoperability.”